January 2017 Article Archives

Relatively few companies are using dedicated fixed assets accounting software, according to a new survey, and are instead relying on homegrown spreadsheets and databases.

The survey, by Bloomberg BNA, which markets its own fixed assets software, found that only about a third, or 37.6 percent, of the 100 U.S. finance executives it polled are using dedicated fixed assets systems. Nearly half of them (or 46.8 percent) said their fixed assets teams spend an average of four to five days a month (or nearly a quarter of their time) on spreadsheet and database maintenance for fixed assets. Another third (34.2 percent) said they spend six to 15 days on spreadsheet and database maintenance for fixed assets.

The FASB proposed replacing today’s rules-based guidance for determining whether to classify debt as current or noncurrent on the balance sheet with a principles-based approach. Debt would be classified as noncurrent only when it is contractually due to be settled more than one year (or operating cycle, if longer) after the balance sheet date or when the entity has a contractual right to defer settlement for at least one year (or operating cycle, if longer) after the balance sheet date. While this approach would require entities to classify debt based on legal rights existing at the balance sheet date, an exception would be provided for waivers of debt covenant violations received after the balance sheet date but before the financial statements are issued. Entities would no longer be able to consider their intent and ability to refinance short term obligations after the balance sheet date on a long-term basis to support noncurrent classification . Comments are due by May 5, 2017

The Financial Accounting Standards Board has released guidance aimed at clarifying the official definition of a “business” for purposes of the accounting rules.

The new accounting standards update issued recently by FASB affects any company or other type of reporting organizations that needs to determine whether it has acquired or sold a business.

The definition of a business can have an impact on many areas of accounting, such as acquisitions, disposals, consolidations and goodwill. The new standard should provide more assistance to companies and other types of organizations in deciding whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The amendments in the update offer a framework accountants can use for weighing when a set of assets and activities actually constitutes a business. The changes come in response to demand from FASB constituents who asked for further clarification on the definition, especially in terms of how to account for acquisitions.

In separate proposals issued recently, FASB addressed balance sheet classification of debt and the disclosure requirements for inventory under the board’s Disclosure Framework.

The proposed Accounting Standards Update on debt classification is designed to simplify guidance used to determine whether debt should be classified as current or noncurrent in a classified balance sheet. If approved, the proposed guidance would replace existing, fact-specific rules with an overarching, cohesive principle for debt classification that would focus on a borrower’s contractual rights and obligations that exist as of the reporting date.

The Internal Revenue Service has issued a notice describing the maximum vehicle values for 2017 that taxpayers need for determining the value of personal use of employer-provided vehicles under the Income Tax Regulations’ special valuation rules.

Notice 2017-03 applies to employer-provided passenger automobiles first made available to employees for personal use in calendar year 2017 under section 1.61–21 (d) and (e) of the Income Tax Regulations.

The maximum value of employer-provided vehicles first made available to employees for personal use in calendar year 2017 for which the vehicle cents-per-mile valuation rule could apply is $15,900 for a passenger automobile and $17,800 for a truck or van.

The National Society of Accountants for Cooperatives (NSAC) is a professional society, comprised of approximately 2,000 individual members actively involved with the financial management and planning of cooperative business.